NZD: NZD/USD - Finds Buyers Toward 0.5900 As Risk Pares Back Early Losses
Feb-06 04:18
The NZD/USD had a range today of 0.5928-0.5967 in the Asia-Pac session, it is currently trading arou...
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CHINA STOCKS: Tech/Govt Initiatives In Focus, Attractive Valuations Help Gains
Jan-07 04:17
With the CSI 300 off to a strong start following gains of 35% last year, domestic forecasters are noting that the market may be transitioning from a "valuation repair phase to a profit-driven phase" with the government's key sectors the focus. However at a P/E of 13.5, the Hang Seng (the most likely place for tech IPOs) lags behind other bourses that are benefitting from the tech surge. The NIKKEI is at record highs above 52,000 and a P/E of 22.1 and the KOSPI at 19.4.
The opportunities are in industries aligned with national strategic priorities, often referred to as "new quality productive forces" by the government namely:
- Artificial Intelligence (AI): The AI sector, particularly AI chips, has been a primary driver of the recent market rally, benefiting from investor optimism and policy support. Though the AI / tech sector has somewhat lagged behind that of Korean and Japanese names, an opportunity some asset allocators are focusing on
- Domestic Semiconductor Production: A central pillar of Beijing's push for tech self-reliance, with directive-driven demand for Chinese-made AI chips in state data centers.
- New Energy Technologies: This sector is expected to benefit from continued government policy support and the country's pivot toward innovation-led growth.
- Innovative Drugs: The innovative pharmaceuticals industry is another area identified for potential growth within the new market phase.
source: Bloomberg Finance LP / MNI
AUSSIE BONDS: Slightly Richer Post-CPI, Mixed On The Day
Jan-07 04:12
ACGBs (YM -1.0 & XM +2.0) are 2-3bps stronger versus pre-CPI levels, but well off post-date highs.
- November trimmed mean CPI inflation moderated 0.1pp to 3.2% y/y in line with consensus, while headline fell more than expected at 3.4% after 3.8%. The complete monthly series is new with little track record and so the RBA will focus on the quarterly data for now with Q4 printing on 28 January.
- Cash US tsys are flat to 1bp richer, with a flattening bias, in today's Asia-Pac session. US ADP private employment & JOLTS data today, NFP Friday.
- Cash ACGBs are flat to 2bps richer with the AU-US 10-year yield differential at +59bps.
- The bills strip is -2 to -4 across contracts.
- RBA-dated OIS is slightly firmer versus pre-CPI levels. The pricing shows tightening across all meetings, with the probability of a 25bp hike rising from 41% for February to 121% by June and 189% by December 2026.
- TCV A$ Nov 2037 Benchmark Bond Tap, 10Y EFP+88-90bp Area
- Tomorrow, the local calendar sees Trade balance data for November.
Figure 1: RBA-Dated OIS – Current
Source: Bloomberg Finance LP / MNI
BONDS: NZGBS: Bull-Flattener But Swap Curve Remains At Highs
Jan-07 04:03
NZGBs closed showing a bull-flattening, with benchmark yields flat to 2bps.
- NZ-US and NZ-AU 10-year yield closed unchanged at +33bps and -28bps.
- Cash US tsys are flat to 1bp richer, with a flattening bias, in today's Asia-Pac session. US ADP private employment & JOLTS data today, NFP Friday.
- NZ swap rates are flat to 3bps, with a flatter curve. Nevertheless, the 2s10s curve remains near cycle highs, the steepest since 2021.
- RBNZ-dated OIS pricing is little changed across meetings. No tightening is priced for February, while October 2026 assigns 20bps.
- The local data calendar is very light this week. Next week we get Nov filled jobs, along with food prices as well.
Bloomberg Finance LP
